Scoop Editor Alastair Thompson recently sat down with Telecom CEO Simon Moutter to talk at length about the business of Telecom, covering its role as an enabler of innovation in an increasingly connected world; the regulatory environment that Telecom faces; internal transformation at Telecom; and the future expected path for Telecom pricing and services.

In Part Two of the in-depth interview, Telecom chief executive Simon Moutter, tells Alastair Thompson government has a right to set security monitoring, but it needs to keep it economically and technically viable.

Government is right to set security monitoring standards says Telecom chief executive Simon Moutter.

"But, whatever they're asking for, make sure it is economically and technically viable," he says.

"Some things are very difficult to do. Some things are wildly expensive; that's what you've got to keep in perspective."

Telecom calls for level playing field

Without being drawn into the deeper issues around morals or individual rights, Moutter says ensuring a level playing field between national and global telecommunications entities is one aspect Telecom emphasises in its submissions to government on the proposed GCSB and privacy legislation.

For example, Skype calls which operate across the internet are heavily encrypted.

"We don’t have the ability to unencrypt them; so we don’t want a law that says we should try to do what is technically impossible," says Moutter.

Potential cost of surveillance

"Equally, we could store all phone call and internet data for five years. But the cost would be unbelievable; so don't pass a law that asks for that."

Around the wider challenge of ultrafast broadband rollout around New Zealand, Moutter is keen to have more government-involved discussion. Though Telecom isn't directly involved in Chorus and other cities’ local fibre companies installations, it has been apparent that the job is more complicated and costly than originally envisaged.

"Players and people are betting billions trying to get this right," says Moutter.

Ministers Adams, Joyce "get it"

"There are a number of issues and it's a moving beast that I think the ministers [Amy Adams and Steven Joyce] get that. But what we and other want is more certainty. There are a range of possible answers, but for goodness sake, let's put a line in the sand. Then we and others will get on with it with confidence and deliver the services that New Zealanders and our businesses desperately want."

Moutter also thinks the 20-year-old legislation guaranteeing free local telephone calling will one day become irrelevant. Telecom itself is not trying to defend landline calling as it becomes increasingly less and less of its overall business.

Arguably, the illusion of free local calls has altered customer behaviour compared to other countries where local calls have traditionally cost something.

Landlines on way out

In America for example 36 percent of households don’t have a landline. The equivalent in New Zealand is 10 percent, but with local calls falling by 10 percent a year: "In seven to eight years that side will be gone," he says.

Moutter says the increasing penetration of broadband and mobile changes the telecoms landscape.

"We’re only just scratching the surface of what will happen. But whatever does, we intend to be a major player in providing the services that New Zealanders will demand."